Mortgage LOX Maker: Source of Funds Letter
Make your own Letter of Explanation (LOX) for down payment source. Confirm where your down payment money came from for mortgage applications. Generate instant PDFs for your lender with digital signature capture.
Your Information
Letter Preview
I, {{borrowerName}}, confirm that the ${{amount}} deposited into my checking account on {{depositDate}} came from {{fundsSource}}.
These funds are my own and are not borrowed. Supporting documentation is attached.
{{borrowerName}}
{{borrowerEmail}}
{{borrowerPhone}}
Borrower's Signature: {{signature:borrowerSignature}}
Date: {{signatureDate}}
Tips for Success
- Keep explanations brief and factual
- Attach supporting documentation when possible
- Review all information before signing
- Submit within 48 hours of your loan officer's request
Important Reminders
- All information must be truthful and accurate
- False statements may result in loan denial
- Keep copies for your records
- Contact your loan officer with questions
When To Use A Source Of Funds Letter
Asset Sale Proceeds
You sold stocks, bonds, vehicles, or other assets to fund your home purchase.
Inheritance Funds
You received inheritance money that you're using for your down payment or closing costs.
Business Sale Proceeds
You sold a business or business interest and are using proceeds for your home purchase.
Retirement Account Distribution
You withdrew money from a 401k, IRA, or other retirement account for your home purchase.
Legal Settlement
You received funds from a legal settlement, insurance claim, or court judgment.
Common Scenarios Requiring Multiple Letters
Self-Employment + Business Income:
- Use this source of funds letter to document business income sources
- Use our self-employment verification to confirm your business status
- Use our large deposit letter to explain unusual business deposits
Severance + Employment Gap:
- Use this source of funds letter to document severance as income
- Use our employment gap letter to explain the unemployment period
- Use our large deposit letter to explain severance deposits
Retirement Withdrawal + Tax Implications:
- Use this source of funds letter to document retirement account withdrawals
- Use our rent-free living letter if rent-free living affects income
How to Use This Source Of Funds Letter Generator
Gather Your Information
Collect all necessary details and supporting documentation before starting the generator.
Complete the Form
Fill out all required fields in the generator. The preview will update in real-time as you type.
Review and Sign
Review your letter for accuracy, add your digital signature, and download the PDF.
Submit to Your Lender
Send the completed letter to your loan officer along with any supporting documentation.
Supporting Documents Your Lender May Need
| Document | What It Tells Your Lender |
|---|---|
| Bank statements showing deposit | Provides additional verification and context for your situation |
| Sale contracts or receipts | Provides additional verification and context for your situation |
| Inheritance documentation | Provides additional verification and context for your situation |
| Retirement account statements | Provides additional verification and context for your situation |
| Settlement agreements | Documents the terms of how the debt was resolved |
Frequently Asked Questions
When will I need a source of funds letter?
Your loan officer will request a source of funds letter if there's confusion about where your down payment money came from.
What sources of funds do lenders accept?
Lenders accept savings, asset sales, gifts, inheritance, retirement withdrawals, tax refunds, and work bonuses as legitimate sources.
How quickly are source of funds letters processed?
Most source of funds letters are reviewed and accepted within a day of submission with proper documentation.
More Home Buying Tools
Mortgage Calculator
Calculate your monthly mortgage payment including taxes, insurance, and PMI.
Calculate payment →Home Affordability Calculator
Determine how much house you can afford based on your income and debt.
Calculate affordability →Gift Letter Generator
Create professional gift letters for down payment assistance from family.
Create gift letter →